Paying For College

Pay Your Dues

How to pay for college

Paying for college is money that will finance your higher education costs.

Getting accepted…

Making it through and graduating…

Finding that first post-school full-time job…

Everyone knows about those challenges associated with college, but many forget about the most important one of all: Student Loans.

Student loan debt is the most common form of increasing debt among 18 to 24-year-olds in America. Currently, more than 40 million Americans hold student debt, owing more than $875 billion in college loans. That’s more than the total amount that Americans owe on their credit cards.

In 2015, the average college graduate was over $35,000 in debt.

One very important thing they don’t teach you in school is how to pay for it. So whether you’re preparing for, or in the middle of, your loans, this guide is for you.

The current level of student loan debt in America now exceeds $1.2 trillion, the second largest form of consumer loan debt behind mortgages.

How to pay for college

While opting to live with your parents for a little while longer is certainly one solution, here are a few options to help with paying for college that might be a little more palatable:

Financial aid (

An official benefactor. AmeriCorps, Peace Corp, National Health Services Corps and ROTC programs offer college money in exchange for a service commitment.

Tax credits, like the American Opportunity Tax Credit (for students in school) and the Lifetime Learning Credit (for students after finishing their first four years). Check out the IRS Tax Benefits for Education Information Center for further details:

What is financial aid?

Financial aid is money to help pay for college or career school. Aid can come from:

  • U.S. federal government
  • State where you live
  • College you attend
  • Nonprofit or private organization

What you can use financial aid for:

  • Tuition
  • Room and Board
  • Books
  • Supplies

Types of financial aid

1. Loans

A loan is borrowed money that will need to be repaid with interest. In terms of student loans, there are two main types: Federal Student Loans and Private Student Loans.

Federal Student Loans

Federal Student Loans are loans that are funded by the federal government.

  • Interest may be tax deductible
  • Eligible federal student loans may be consolidated into one loan with one monthly payment
  • You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time
  • There is no prepayment penalty fee
  • The interest rate is fixed and is often lower than private loans
  • Credit check and co-signer is not typically required
  • Loan payments may be based on your income
  • Undergraduate students with financial need may qualify for a subsidized loan where the government pays the interest while you are in school on at least a half-time basis

Private Student Loans

Private Student Loans are non-federal loans, given by lenders such as a banks, credit unions, state agencies, or schools.

  • Repayment options to defer payment until later or pay more up front
  • Loans can be competitive, though they may be dependent on credit score
  • Available for post-graduate expenses for law, medical and dental students (such as bar exam and residency costs)

Calculator: Who wants to be a millionaire?

Since 1999, student debt has increased more than 500 percent, while the average salary has decreased by 10 percent.

Important things you need to know about student loans:

  • YOU CAN LOSE YOUR LICENSE – If you default on your student loans, you can be stripped of your professional license, and in Montana, even have your driver’s license suspended.
  • YOUR STUDENT LOANS CAN MAKE YOU UNEMPLOYABLE – Many employers run credit checks on their applicants, so if you’ve ever been delinquent on a student loan, your credit score may have been affected and could cost you a job or promotion.
  • DIFFICULT TO GET THEM DISCHARGED, EVEN IN BANKRUPTCY- While consumer or gambling debts can be erased by filing for bankruptcy, that is not an option to cover education debt.

70% of all loan defaults are from students who attended for-profit schools or two-year community colleges.

2. Grants and scholarships

Many major companies, government agencies and globally-recognized nonprofits offer scholarships with significant awards towards college fees. Local businesses and organizations in your hometown may offer some as well. The key is to apply to as many as possible. is a great resource for finding scholarships and grants that you are eligible for. Even the smaller ones for a couple hundred dollars are great – every little bit helps!

3. Work-study jobs

A Work-Study Job: The federal work-study program gives students a chance to work part-time jobs to fund college costs. It subsidizes paychecks from certain qualifying on-and-off campus jobs.

Preparing in advance

Maybe it couldn’t help you right now, but you can prepare for your future! There are tax-advantaged education investment accounts, like 529 plans, to help with your child’s college tuition.

You can get more information on Saving for College, here:


You can always move back home.

Fun facts:

  • Currently, the most expensive college in the U.S., is Harvey Mudd College in Claremont, CA. First-year students there were charged over $63,000 for the 2015-16 school year. Kentucky’s Berea College charges the least, with the same tuition and fees rounding out at $870.
  • The school where students owe the most is the University of Phoenix, a for-profit college. More than 1 million of its former students owe $35.5 billion, and it is consistently ranked highest in percentage of students who default on their loans.
  • Mom and dad are trying to help out. Approximately 17% of graduates have parents with loans out on their behalf.


  1. Smith, Vanessa. “Costs of College Exist Long after Graduation.” The Marlin Chronicle. Accessed February 17, 2015. Snyder, Michael.
  2. “16 Shocking Facts About Student Debt And The Great College Education Scam” Business Insider. December 26, 2010 Pilon, Mary.
  3. “College Graduates Facing Mounting Debt, Rising Unemployment” The Wall Street Journal McCarthy, Kyle.
  4. “10 Fun Facts About the Student Debt Crisis”. Huff Post College. March 24, 2014 Snider, Susannah. U.S. News and World Report
  5. “Infographic: Paying for College”
  6. U.S. News and World Report “10 Private Schools with Highest, Lowest Sticker Prices”
  7. Jacobs, Peter. Business Insider. “America’s 20 most expensive colleges” August 26, 2015 Lobosco, Katie.
  8. “These grads are crushed by college debt” Web:
  9. Sparshot, Jeffrey: “Congratulations, Class of 2015. You’re the Most Indebted Ever (For Now)”
    May 8, 2015 Web: The Wall Street Journal Business

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